Sofa plea against free advice

Sofa chairman Robert Reid has made a passionate appeal to all IFAs to stop claiming they offer free advice.

In his opening speech at the Sofa Update Conference In Birmingham, Reid claimed the services IFAs offer will never be fully valued by consumers unless they increase levels of professionalism and move away from the concept they offer free advice.

He argues IFAs have a central role to play in breaking down consumer&#39s inherent reluctance to pay for advice by proving they are professional and offering valuable advice which should be paid for the same way as legal or medical advice is paid for.

Reid&#39s calls for greater levels of professionalism follows the announcement Winterthur is teaming up with Sofa to offer a software package which enables IFAs to calculate fees to charge clients.

The &#39Toolkit&#39 package will help IFAs calculate an hourly rate to charge clients, keep track of how much time they have devoted to individuals and how much money they are due from clients.

Sofa says the package is designed to ease IFA concerns amid increasing pressure from the Government and regulator to move away from a commission based charging structure to fee based charging structures.

Reid is also is calling for the industry to work harder at developing one recognised professional qualification, as he believes this is the key factor in raising the profile of IFAs and gaining the trust and respect of consumers.

Reid says: “The phrase “we offer free advice” needs to be banned if we are going to convince the public of the value of advice.

“We need to continue to work together to reduce the number of initials advisers are able to add after their names and create one recognised qualification.”

Recommended

Equity Isa sales topped £660m in October, for the first time beating Pep figures, according to research by the Association of Unit Trusts and Investment Funds.Last year for October Pep sales totalled £630m.About 42 per cent of the sales came from tied agents and sales forces while IFAs took 39 per cent of the business. […]

The Financial Services Authority has launched an enquiry into the retail stockbroker market following fears firms may be struggling to cope with a surge in private investors.Over the past two months trades undertaken by private shareholders has doubled to 100,000 with investors pouring into telecom and technology stocks.The FSA is now demanding a number of […]

M&E Network is writing to its 350 plus member firms warning against recommending mutual life offices to obtain potential windfalls.The network states the mutual status of a company “MUST NOT” form any part of a recommendation and is threatening “remedial action” if it&#39s proved a policy has been sold on that basis.The move comes against […]

The Office of Fair Trading has said it needs more time to examine Royal Bank of Scotland&#39s £25bn bid for National Westminster Bank.The bank&#39s failure to win immediate clearance brings fresh hope for the Bank of Scotland which made a hostile bid for NatWest a couple of months ago.

Newsletter

Latest from Money Marketing

Independent governance committees at big-name pension providers are failing to safeguard the interests of savers and the FCA must take action, fresh research finds. In 2015, the FCA required contract-based pension providers to appoint IGCs to act as champions of savers’ interests. IGCs are required to publish annual reports to increase transparency and encourage comparison […]

The FCA is reviewing the content of its pension transfer specialist examination standard in light of recent issues with pension transfer advice, Money Marketing understands. The regulator does not offer qualifications but it does have a role in setting standards for exams and publishes “appropriate examination standards” guidance. Money Marketing understands a working group, mostly […]

Building on auto-enrolment’s success and fine tuning the pensions dashboard are high on the list As I write my first Money Marketing column of the year, it has given me an opportunity to look back on what the Government has done to transform pensions and savings for people since 2010. Five years on from the […]